How to Build a Scalable Product

Photo by Austin Distel on Unsplash

A few weeks ago, my younger cousin and his cofounder came over to tell me about their new startup. They immediately pulled out their phone and showed me their mobile application. I was impressed, until I realized that they hired someone to build their technology before they even validated if their product was in demand. At that moment, I wished they had spoken to me about their startup a year earlier. Even though they did conduct surveys, I would have told them to explore and research their market in much more detail before building the application. Since they are a B2C company, I would have encouraged them to go out to the market and test their business model using free tools. That way they would have understood the user journey and the users needs at a much deeper level without any assumptions.

I recently realized that this is a common mistake many founders do, so here I am today, writing this quick blog to share with you what I told my cousin and his cofounder:

Founders should always test a product, feature, or service in an unscalable way before building it. This unscalable tactic allows entrepreneurs to actually know if what they are building is something that people want or not. If they start getting good traction, then they should go ahead and build that product/feature/service in a scalable way. If not, then they should end their project instantly. That way, they did not spend too much resources or time on a doomed project.

This is a successful strategy that a lot of companies use before launching something. Here are a few examples:

Careem: Careem manually matched drivers to passengers by using a simple website, basic phone GPS, and sending manual SMSes. When they got sufficient traction to prove that their business model worked; that is when they invested their time and money in building some fancy technology.

Airbnb: The founders of Airbnb realized that hosts who had better photos of their apartment or house were doing better that those who had worse photos. So, the founders started going around people’s homes and started taking better pictures of their houses in order to upgrade the hosts’ postings. That small action led to improved demand on these homes. From there, Airbnb started hiring gig workers to take professional photos of hosts’ houses and had an intern take care of their logistics. Eventually, that service was so beneficial that it became a service that hosts could request through the website. The service still exists today, but not in all cities.

DoorDash: DoorDash began when a Stanford student created a website called “Palo Alto Delivery” with a few Palo Alto restaurants’ menus on it (PDF format). The founder then added his phone number in the middle of the website so people could order through him. In the first week, he got a decent amount of calls, went to restaurants, bought the food, and was delivering it himself. After getting overwhelmed with orders, he had a few friends help him. His business kept growing that he eventually realized that his service was in high demand that he could actually start a business out of it. Voila, the birth of DoorDash.

Myself: A friend of mine named Ayah Saeed and I have this side hustle where we match companies we know with quality candidates that fit their vacancies. We started doing this to see if what we are doing is valuable and if people would like our service. We decided that if we do get a lot of traction, then we might think about turning our side hustle into a scalable company. We are only three months in and we are doing everything on Google Sheets and Google Forms. Since our start, we have helped 12 people get hired. That number is still not high enough for us to build that scalable product (maybe soon though).

I hope these few examples were useful and proved my point. Then again, what I am saying is not blasphemy. Y-Combinator have been saying this for a long time. “Build things that don’t scale” is a piece of advice YC entrepreneurs hear regularly. Founders barely have any resources and time to build a great company. Thus, they should always try to minimize their risks and make educated decisions.

So the answer to how to build a scalable company is: validate your business model in an unscalable way first.

Note: All the stories I mention are hyperlinked. Click on the name of the company for the original source.

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Omar Billeh

Omar Billeh

Investment Associate at Propeller